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Wyman Counsels Fiscal Caution Despite Surplus

Contact: Bob King
860-703-3311

State Comptroller Nancy Wyman said today that despite the projected $224.8 million state budget surplus for the fiscal year just ended, policymakers shouldn't rush to create new permanent programs to spend the money.

In her monthly letter, Wyman said that much of the surplus, from increased tax collections, should be viewed as one-shot revenues. "The one-time nature of these receipts may prove problematic in meeting revenue targets for the current fiscal year," which ends June 30, 1997, Wyman wrote.

"We need to be careful before we decide to commit any of these funds to recurring programs," Comptroller Wyman said. "Getting through fiscal 1996-97 will be difficult in any event," she added, since government faces a mandate to find $85 million in unidentified budgetary savings, and since the level of federal assistance to the state is uncertain.

Wyman also said that even though $135 million of the surplus would, according to law, be transferred to the state's budget reserve, or "rainy-day" fund, the sum in this fund would total only about $216 million. But "fiscal prudence demands" that some 5 percent of appropriations -- about $453 million -- be set aside, Wyman said.

Wyman agreed with Rowland administration figures which showed larger-than- expected collections of income, corporation, and inheritance and estate taxes. The income tax alone is projected to bring in $171 million more than expected. This is widely believed to be due in large part to investors' taking profits from rising financial markets.

For Immediate Release
August 1, 1996

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